Citation NR: 9722284
Decision Date: 06/25/97 Archive Date: 06/30/97
DOCKET NO. 96-34 750 DATE
)
RECONSIDERATION )
)
From the
Department of Veterans Affairs Regional Office in Cleveland,
Ohio
THE ISSUE
Eligibility for the payment of attorney fees from past-due
benefits.
ATTORNEY FOR THE BOARD
N. W. Fabian, Associate Counsel
INTRODUCTION
In an October 1996 decision, the Board of Veterans’ Appeals
(Board) determined that the attorney in this case was not
eligible for the payment of attorney fees from the veteran’s
past-due compensation benefits on the basis that the
requirements for a valid fee agreement had not been met. The
attorney appealed this determination to the Court of Veterans
Appeals (Court). In January 1997 the Board Chairman issued
an Order for Reconsideration, sua sponte, and withheld
further action on the reconsideration order unless and until
the Court returned jurisdiction of the appeal to the Board.
See Cerullo v. Derwinski, 1 Vet.App. 195 (1991). In April
1997, based on the Secretary’s motion, the Court vacated the
Board’s October 1996 decision and remanded the appeal,
granting leave to the Board to reconsider the October 1996
decision. This decision of the reconsideration panel
replaces that decision.
CONTENTIONS
The attorney has made no specific contentions pertaining to
the issue being reconsidered, which is whether the attorney
and the veteran had entered into a valid fee agreement within
the one-year period following the Board’s decision on the
veteran’s appeal.
DECISION OF THE BOARD
The Board, in accordance with the provisions of 38 U.S.C.A.
§ 7104 (West 1991 & Supp. 1996), has reviewed and considered
all of the evidence and material of record. Based on its
review of the relevant evidence in this matter, and for the
following reasons and bases, it is the decision of the Board
that the evidence supports the payment of attorney fees to
the attorney from the veteran’s past-due benefits.
FINDINGS OF FACT
1. In a February 1992 rating decision, the regional office
(RO) denied entitlement to service connection for post-
traumatic stress disorder (PTSD).
2. In an August 30, 1994 decision, the Board upheld the RO’s
denial of entitlement to service connection for PTSD.
3. In May 1995 the veteran retained the attorney to appeal
the Board’s August 1994 decision to the Court.
4. In September 1995 the veteran and the attorney entered
into an agreement for the attorney to represent the veteran
before the Department of Veterans Affairs (VA), for which the
veteran agreed to pay the attorney an amount equal to
25 percent of the total amount of any past-due benefits,
contingent upon past-due benefits being awarded.
5. In April 1996 the veteran, through his attorney in fact,
and the attorney modified the September 1995 agreement to
provide that the veteran agreed to pay the attorney an amount
equal to 20 percent of any past-due benefits, contingent upon
past-due benefits being awarded, said amount to be paid
directly to the attorney by the VA from the past-due
benefits.
6. In a rating decision dated March 14, 1996, the RO granted
service connection for PTSD and assigned a 30 percent
disability rating effective July 29, 1991, resulting in an
award payment date of August 1, 1991.
7. The March 1996 rating decision resulted in the award of
past-due benefits for the period from August 1, 1991, to
March 14, 1996.
CONCLUSION OF LAW
The requirements for the payment of attorney fees directly to
the attorney from the veteran’s past due benefits, in an
amount not to exceed 20 percent of the past due benefits,
have been met. 38 U.S.C.A. § 5904 (West 1991 and Supp.
1996); 38 C.F.R. § 20.609 (1996).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
The law provides that attorneys and agents may charge
claimants or appellants for their services before the VA,
including the Board, only if all of the following conditions
have been met: (1) a final decision has been promulgated by
the Board with respect to the issue, or issues, involved; (2)
the Notice of Disagreement which preceded the Board decision
with respect to that issue, or issues, was received by the RO
on or after November 18, 1988; and (3) the attorney or agent
was retained not later than one year following the date that
the decision by the Board with respect to the issue, or
issues, was promulgated. 38 U.S.C.A. § 5904(c); 38 C.F.R.
§ 20.609(c).
The veteran and an attorney may enter into a fee agreement
providing that payment for the services of the attorney will
be made directly to the attorney by the VA out of any past-
due benefits awarded as the result of a successful appeal.
Such an agreement will be honored by the VA if all of the
following conditions are met: 1) The total fee payable,
excluding expenses, does not exceed 20 percent of the total
amount of past-due benefits awarded; 2) the amount of the fee
is contingent on whether the claim is resolved in a manner
that is favorable to the veteran; 3) the award of past-due
benefits results in a cash payment to the veteran from which
the fees may be deducted. 38 C.F.R. § 20.609(h).
I. Factual Background
Service connection for PTSD was denied by the RO in February
1992. The veteran perfected an appeal to the Board, and in
an August 30, 1994 decision, the Board upheld the denial of
service connection for PTSD on the basis that a clear
diagnosis of that disorder had not been established. In May
1995, the veteran and the attorney entered into a
representational agreement, in which the attorney agreed to
represent the veteran before the Court on a pro bono basis,
and the Board’s August 1994 decision was appealed to the
Court.
As the result of a joint motion for remand, in July 1995 the
Court vacated the Board’s August 1994 decision and remanded
the case to the Board. In an August 1995 letter to the
attorney from the Board, he was asked whether he intended to
represent the veteran before the Board and the VA, and in the
same month he responded that he did not intend to represent
the veteran in the proceedings pursuant to the Court’s
remand.
In September 1995 the veteran and the attorney entered into
an agreement in which the attorney agreed to represent the
veteran before the VA and the Board. The September 1995
agreement references the May 1995 agreement, and specifies
that the veteran agreed to pay the attorney a fee equal to
25 percent of any past-due benefits, contingent upon past-due
benefits being awarded. The agreement further indicates that
the fees were to be paid by the veteran directly to the
attorney, and not withheld from past-due benefits by the VA.
In October 1995 the Board remanded the case to the RO for
additional development, including a VA psychiatric
examination. In the same month the attorney was notified
that, based on the September 1995 fee agreement, any past-due
benefits to which the veteran was entitled would not be
withheld for the payment of attorney fees. He was also
notified that if it was the intent of the parties that the VA
pay the attorney fees directly to the attorney, the agreement
would have to be modified to that effect and the amount of
the fee, as a percentage of past-due benefits, would be
20 percent, in the event that such benefits were awarded.
As a result of the development following the Board’s October
1995 remand, the RO, in a March 14, 1996 rating decision,
granted service connection for PTSD with a 30 percent
disability rating effective July 29, 1991. Compensation was
paid at that rate effective from August 1, 1991. In April
1996, the attorney and the veteran’s wife, his attorney in
fact, modified the September 1995 agreement to provide that a
fee equal to 20 percent of any past-due benefits was payable
to the attorney directly by the VA.
II. Analysis
The Board has reviewed the evidence of record and finds that
the requirements for a valid fee agreement between the
veteran and the attorney have been met. A final decision was
promulgated by the Board in August 1994 denying service
connection for PTSD. The Notice of Disagreement which
preceded the Board’s August 1994 decision was received by the
RO after February 1992. The attorney was retained in May
1995, which is within one year of the Board’s August 1994
decision. Although the terms of the representation were
subsequently modified in September 1995 and April 1996, the
Board finds that the attorney was initially retained by the
veteran within the one-year period, thus meeting the
requirements of 38 U.S.C.A. § 5904(c)(1); 38 C.F.R.
§ 20.609(c)(3).
The Board further finds that the requirements for the payment
of attorney fees directly to the attorney from the VA, in the
amount of 20 percent of the past-due benefits, have been met.
According to the terms of the modified agreement, the total
fee payable, excluding expenses, does not exceed 20 percent
of the total amount of past-due benefits awarded; the amount
of the fee is contingent on whether the claim is resolved in
a manner that is favorable to the veteran; and the March 14,
1996 grant of service connection for PTSD, with a 30 percent
disability rating effective July 29, 1991 and compensation
payable from August 1, 1991, resulted in a cash payment to
the veteran from which the fees may be deducted. For these
reasons the Board has determined that the attorney is
eligible for the payment of attorney fees from the veteran’s
past-due benefits, not to exceed 20 percent of the benefits,
for the period from August 1, 1991, to March 14, 1996.
ORDER
Attorney fees from past-due benefits may be awarded pursuant
to the terms of the modified May 1995 attorney-fee agreement.
The attorney should be paid 20 percent of past-due benefits
awarded for the grant of service connection and compensation
for PTSD for the period from August 1, 1991, to March 14,
1996.
THOMAS J. DANNAHER WILLIAM J. REDDY
Member, Board of Veterans’ Appeals Member, Board
of Veterans’ Appeals
D. C. SPICKLER
Member, Board of Veterans’ Appeals
NOTICE OF APPELLATE RIGHTS. Under 38 U.S.C.A. § 5904(c)(2)
(West 1991 and Supp. 1996), a finding or order of the Board
of Veterans' Appeals upon review of an agent's or attorney's
fee agreement may be reviewed by the United States Court of
Veterans Appeals under 38 U.S.C.A. § 7263(d) (West 1991).
Under 38 U.S.C.A. § 7266 (West 1991 & Supp. 1996), a final
decision of the Board of Veterans' Appeals may be appealed to
the United States Court of Veterans Appeals by a person
adversely affected by the decision within 120 days from the
date of mailing of notice of the decision. The date which
appears on the face of this decision constitutes the date of
mailing and the copy of this decision which you have received
is your notice of the action taken by the Board of Veterans'
Appeals.
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